THE LOCATION DETERMINANTS OF AN ONLINE FOOD DELIVERY COMPANY

Abstract

The location aspect of FDI remains an underresearched topic in international business literature. This research aims to explain the location-based advantages that an online food delivery company seeks when performing FDI. The theoretical framework consists of Dunning’s OLI paradigm with the focus being on the location aspect. Complementing the OLI paradigm framework are the location determinants of FDI. The interview themes were adopted from Dunning’s list of FDI location determinants.

The research question was approached through qualitative research and a case study was chosen as the research method. The empirical data gathered was collected through semi-structured interview with the founder and operation officer of the case company.

The research findings indicate that the location determinants of an online food delivery company are related to the size of market, geographical proximity to their headquarters and the competitive environment of the target location. Based on the findings of this thesis four managerial implications were drawn: (1) The target market’s size and price level are the key factors when choosing the FDI location; (2) it is generally favourable to be the first to enter the location; (3) geographical proximity to the home country decreases costs involved in FDI and (4) researching and investigating the potential new location for FDI is vital before the location choice is made.

More qualitative research on FDI location and location determinants are suggested for further research. The topic of FDI location is a complex and constantly evolving subject that has been neglected especially in a company specific context.